The next two decades will see a new digital society emerge. This better connected digital society can be more efficient and sustainable than anything we have seen before, thanks to a combination of innovation providing higher speed data connections, the Internet of Things, cloud computing and big data analysis.
This revolution will see the physical and virtual worlds converge over cost-effective, mostly mobile, broadband connections to help the world to live and work smarter. All manner of devices, from more intelligent vehicles and digital controllers in our homes to real time medical monitors on our persons will make us better connected and more efficient over new wireless broadband infrastructure.
This digital revolution promises real benefits for economies too. Research shows that every 10% increase in broadband penetration boosts national GDP by 1.3% and employment rates by 2% to 3%. Industrial production efficiency is also boosted by between 5-20%, while innovation efficiency in a better connected environment can be better by a factor of 15 times.
Wireless spectrum is the invisible fuel for the global digital revolution. Spectrum is a scarce commodity yet demand for it rises with the millions of additional users that join the mobile internet each year worldwide. The key is for policy makers around the world to recognize this and follow the lead of markets like China, South Korean and Japan who approach spectrum as an engine of social and economic development and have defined forward thinking and balanced regulatory spectrum policies that encourage the delivery of the digital society.
We know that technical innovation ensures that each generation of mobile technology treats spectrum more effectively that the technology what went before. 4G networks, for example, use spectrum three times more effectively than 3G networks; 3G networks are four times more efficient than 2G networks. Looking ahead, Huawei predicts that 5G networks, which will be available from 2020, will use spectrum up to 30 times more effectively than today’s most advanced wireless technologies.
Policy makers and regulators can help by drafting more flexible, technology-neutral spectrum licenses that enable operators to more freely upgrade customers to more efficient technology, rather than being locked in to using specific spectrum blocks for pre-defined applications that can be overtaken by newer technologies. Allowing operators to flexibly re-farm 2G spectrum for 4G subscribers would effectively boost available spectrum by as much as 10 times because 4G technology uses spectrum much more efficiently that 2G. The number of 2G subscribers is also falling fast in many markets. We are starting to see movement by regulators in the UK and US towards technology-neutral policies, while other markets such as Pakistan are also planning technology-neutral policies.